BAHAMAS Law and Practice Contributed by: Alistair Chisnall and Erica Paine, Graham Thompson
in title are addressed by a seller or their counsel prior to closing. The majority of purchasers or mortgagees rely upon Bahamian counsel to investigate title and provide a written legal opinion certifying the good and mar - ketable nature of the title to be acquired or held as security before closing on the transaction. The opinion (locally referred to as a “Report on Title”) is backed by the firm’s professional indemnity insurance. However, title insurance is offered in The Bahamas by a number of title insurance agents representing major interna - tional title insurance companies, and the procedure to acquire insurance is usually handled by local coun - sel but is no different to what foreign buyers may be accustomed to in their home jurisdictions. In some cases, certain developers will provide only for title insurance to be issued to buyers under their purchase contracts and will not adduce title to a property or address requisitions, in order to streamline and expe - dite the sales process. 2.5 Typical Representations and Warranties In The Bahamas, real estate purchase and sale agree - ments increasingly include basic representations and warranties by the parties, particularly in commercial real estate transactions, but this is subject to the nature of the transaction and the sophistication of the parties, and not all firms have adopted such practice. Given the relatively limited and rudimentary use of rep - resentations and warranties in commercial real estate transactions, representation and warranty insurance is not typically sought by the parties to the transaction. A purchaser may have remedies commonly available under common law for misrepresentation or breach of agreed representations/warranties. In the absence of agreed seller disclosures, representations and war - ranties, the representations and warranties of a seller are limited under Bahamian law and generally relate to implied covenants for title only (regarding the right to convey, quiet enjoyment, freedom from incumbrance, and further assurance). In general, where representations and warranties are included in commercial real estate transactions it is not typical for them to be time limited, nor for the seller’s liability to be subject to any cap.
The general position under Bahamian law, and a mat - ter of good commercial local practice, is that the buyer must satisfy themselves as to the condition and fit - ness for intended use and purpose of the land they intend to purchase before proceeding and carry out all the necessary due diligence it would be prudent to undertake. 2.6 Important Areas of Law for Investors While obtaining general guidance on Bahamian real estate law and contracts is important, an investor should ensure that they are advised on: • how closing and carrying costs may arise (whether as taxes or additional fees); • the preferable structure for the holding of title to their property (and how this may interplay with estate planning or exchange control considera - tions); • how zoning or planning may affect desired devel - opment plans; • in the case of non-Bahamians, the regulatory requirements for owning and developing real estate or operating a business in The Bahamas; and • in the case of non-Bahamians interested in estab - lishing immigration status in The Bahamas by virtue of their purchase and investment, the considera - tions to be understood in planning and co-ordinat - ing these two goals. 2.7 Soil Pollution or Environmental Contamination The environmental liability laws of The Bahamas are contained in various statutes, but the Environmen - tal Health Services Act, 1987 and the Environmen - tal Planning and Protection Act, 2019 are of primary importance. Generally, the environmental laws are not onerous and seek to hold liable the person responsi - ble for any environmental damage. A buyer of real estate in which there is soil pollution or environmental contamination may (practically speak - ing, as much as legally speaking) inherit the respon - sibility of remediating pre-existing environmental issues. However, Section 28 of the Environmental Planning and Protection Act, 2019 provides that the liability for historical pollution is imposed on any per - son found to have polluted the environment before
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